Indesign XML works very well with dynamically loading images.
I am using Indsign 2.0 and the following works fine.
In Indesign:
Design the layout with a rectangle frame (the one with a cross on it), right click, define the contents as graphic and give it a tag name ie Image1.
In XML file:
Define the tag for Image1 with a href attribute:
<?xml version="1.0" encoding="UTF-8" standalone="yes"?>
<Root>
<Tag1>My New Product</Tag1>
<Tag2>Buy this and you never need anything else again</Tag2>
<Tag3>This Product gives you the following benifites</Tag3>
<image1 href="file:///C:/images/1380.jpg" />
</Root>
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